Friday, April 15, 2016

NDP Budget Alberta-style

With oil revenue dropping from $9 billion to just over $1 billion, no government, no ideology, no party, especially one that hasn't even been in power for a year would be able to quell out of the dire deficit situation.

The things I liked in this budget are the small business tax cut from 3% to 2%. Let's admit there's at least that.

Let's also admit that the problem with this budget stems from the colossal expense of health care, which is well over half the budget and will continue to rise as the bulk of the population ages.

With that, there needs to be a fundamental change in the way health care is delivered and funded, otherwise, the big baby boomers now retiring will eat away at the future of their children and grandchildren.  That said, it's already happening.

Over twenty years ago, if you read the book "Boom, Bust, and Echo", you'll know that the baby boomers made up a bulk of the population and during their time of highest income earning, they still paid much less in taxes than their children do now at that same time of earning, but they spent and built up our corporate and government social bureaucracy to a point of non-sustainability into future generations.

The plan under the Lougheed PCs in the 70's was to not depend on natural resource revenue for operations and infrastructure, but to make the Heritage Savings Trust so big, the gov't could use the interest to pay for the very things that recent PC and now NDP governments were trying to save.

We all know that the Klein government of the 90's slashed and burned to get to zero, but left the province with horrible infrastructure and a health system that appeared to be beyond the point of repair.  Coupled with front-line worker wage cuts to teachers and nurses, in the long-run that policy didn't really get us anywhere.  I maintain that paying teachers and nurses more salary isn't going to destroy our society or budget for that matter.

But the PCs under Stelmach and Redford didn't fair any better and continued to spend spend spend, with little real improvement.

Come on, people, look more closely.  The Alberta health system bureaucracy is massive.  They have spent a lot on technology yet still do not run as efficient as they could.  Top bureaucrat wages and benefits are insane.  The number of full time lawyers that work for Health alone eats up millions.

Don't buy into the B.S. that there aren't areas in the government where efficiencies and common sense can't be found.

Why can Germany offer free health care at 10% of the cost per capita?

Yes, terrible oil prices are certainly having an effect on Alberta, but federally as well, with tax revenues down across the board.

And so here we are.  Massive budget deficits, and a carbon tax on fuel that won't do anything to quell carbon output which won't do anything to quell global warming.

The answer isn't to raise taxes on the very middle class that are trying to create jobs and raise families in good communities.  Once you raise taxes on fuel, the costs of everything go up because everything depends on transportation--you know, like FOOD, SHELTER, and CLOTHING.  And a few hundred in subsidies aren't going to equal this out with lower income folks.  They will still pay more over a year, not just in fuel, but on everything.

In the longer term, the government will realize that their carbon tax policy will have an overall net negative effect on the economy.

But in four years, they won't be around to see it anyway.


Frances said...

Small budget tax reduction from 3% to 2%. Okay if you're paying Alberta taxes. Not so good if you have employees who are now above the minimum wage but who will all be expecting really high (percentage-wise) wage hikes to keep their wages as far above the minimum wage as they were. Won't see any "profits" to enjoy said tax relief.

Joe said...

Ya know I could have sworn blogging tories was for conservative thought and here we are getting the ndp plugs posting. Seriously buddy get a room. Ralf did not do any lasting damage to Alberta and his cuts were what allowed Alberta to prosper. There was no infrastructure deficit and the problem with the health system is that it remains a government monopoly.

fernstalbert said...

The only way to cure a deficit is to stop spending money - I see no reduction in provincial employee numbers, wages or benefits. Until then, please do not lecture on the past - time to deal with the here and now.

Anonymous said...

old white guy says........when my cash flow drops I have to cut spending.